We’ve all heard it; passive income is a myth. This mindset is all too common, limiting and quite honestly, tragic.
The truth; Passive income is the future of business, and life and money and actually gives you a chance at living your best possible life.
But instantly those doubts come up as to whether or not it is something that is really possible for you. General doubts, folks that have failed and unfortunately, some people in industries like property, multi level marketing and Bitcoin, have given passive income a bad name. And all this has come together to make people believe that perhaps passive income isn’t for them, or perhaps it’s not something that is achievable for them.
Well, I’m here to tell you that is not true. It is achievable and even more so when you already have a business in place.
Just because some people have a different perspective on passive income doesn’t mean that it’s not possible for you, and that there aren’t options for you. As a business owner, it’s really easy to overcome by simply understanding the lies that are rife about passive income.
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LIE NUMBER 1: Financial Terms for income have the same meaning
First and foremost, the difference between passive, residual and recurring income must be clarified. There are multiple terminologies in the world that suggests that passive income, residual income and recurring income are the same thing. They are not.
- According to the Cambridge English Dictionary, the definition of residual income is ‘income that a person, company, or organization has left after they have paid taxes, debts, etc.’
- The definition of recurring income is ‘happening many times, or happening again’ i.e money that arrives monthly, like a set salary.
- Passive income is earnings ‘derived from enterprise in which a person is not actively involved’.
See… all completely different! Glad I cleared that up!
LIE NUMBER 2: Multi-level marketing is the only option for passive income
The term residual income is often used in the network marketing world and in the wrong context. I know I’m going to offend some people here and I’m ok with that, because let’s face it; There are MLM and NM’s out there that have given the industry a bad name.
I’ve seen it claimed time and time again that passive income is something that is easily achievable through using multilevel marketing strategies. That is not the whole truth in the cases of most MLM companies.
I’m sorry to say and for those that are successfully working in network marketing, then good for you, but what some fail to tell you, when they’re flogging their campaign and fab lifestyle, is that the passive part of the income that they receive is recurring income as a result of their downline, not from the product sales. (I will say here that this is not the case for some companies, for example, those selling a subscription service who receive a percentage share of that subscription.)
But many don’t actually make it clear that that’s the case because, if they did, those team leaders wouldn’t get the recruits for their downline. So I’m making it clear instead. In order to have a successful MLM career, you must understand the difference or join a company that offers excellent returns for your work including recurring revenue from subscriptions.
You can have a massively successful MLM network marketing business, but unless you’re in a subscription-sales-model, your residual income will come from digital alternative products or from your downline, not from the direct sales that you make in your business. The sales that you make in your business are just that; monthly sales that you must make time and time again, in order to make a living.
Lie Number 3: Bitcoin is an easy way to make passive income
I don’t even want to have to write a paragraph on this, but unfortunately I need to, because in the modern day Bitcoin and mining seems to be something that people are drawn into and think is super exciting, but they don’t fully understand the concepts. And I have a confession to make; I don’t understand them either.
And that’s why I avoid them like the plague.
Let me put it out there:
Firstly, Bitcoin investment is an investment with associated risk. Like stocks, bonds and other financial investments, this is not a passive income stream, it’s an investment. A risk you take with your existing assets (money). If you don’t have any money in the first place, you can’t invest. It’s that simple. That does not make a passive income stream. It’s a clearly different thing.
Second; you cannot make money from something unless you fully understand it, and let’s face it, that’s why most of us don’t invest. It’s because we don’t get it! And that’s absolutely ok!
And that, my dear friend, is why I advocate creating passive income streams from an existing business, and using it to develop something that you already know, use and understand. That is the key. If you are an expert in your field, you can absolutely create something awesome, instead of investing in something you don’t fully understand.
Lie Number 4: Property/Real Estate is the only REAL passive income option
Rubbish! Rubbish I say! And I’ll say it again for good measure! Rubbish, rubbish, rubbish!
Yes property investment can make you a multimillionaire. Yes flipping houses can make you plenty of cash but no, no, no – it is not easy, straightforward or without work. Again, this is an investment and an opportunity to make huge returns, but it can also bring lots of hard work and heartache (trust me, I’ve been there!)
Property is definitely something to consider when it comes to making investments and growing existing wealth but please, don’t think of it as the only option for creating passive and recurring income.
Lie Number 5: There’s a right time to think about passive income
Rubbish! If you have your own business, passive income is an option for you. There will never be a right time, a good time or the perfect time. The best time to do it is right now. Start working on your business instead of in it!
Truth: You Can Do It Anyway
Now we’ve gotten over the doom and gloom and blasted those lies into the next century, let me make it abundantly clear:
Passive and recurring income is still possible for you.
Increasing your bottom line with further residual income is possible for you.
Leveraging what you already do well, to create passive, semi-passive and MORE residual income is possible for you.
If you already have a business, you have the seeds from which an entire field of income streams can grow. I promise. And the best place to start understanding how that’s possible for you and your business is in the Passive Business Academy. Find out more here or you really are leaving money on the table 😉